(TRENTON) – Legislation sponsored by Assembly Democrats Ruben J. Ramos Jr., Connie Wagner, Annette Quijano and Paul Moriarty to save more than a half-million dollars per year by modernizing the state’s payroll system has been signed into law.
The law (A-720) requires direct deposit for all state employee compensation on and after July 1, 2014, and allows counties and county colleges, municipalities, school boards to opt for mandatory direct deposit for all employee compensation on or after July 1, 2014.
It eliminates administrative costs associated with mailing pay stubs to employees by requiring that all pay information now be available online via the employee’s assigned e-mail address.
“It’s the 21st century and it’s time the state of New Jersey began acting like it,” said Ramos (D-Hudson). “There’s no excuse as to why the state insists on physically mailing pay stubs that are sealed in an envelope, printed on paper, stamped and labeled. This is a recurring administrative cost that the state incurs for thousands of employees.”
Under this roll-out, the treasurer will also have the authority to provide exemptions and waivers for certain employees and departments that cannot accommodate the technological requirements. By fiscal year 2015, the plan could save an estimated $540,000 per year.
“Numerous banks offer free checking with direct deposit,” said Wagner (D-Bergen/Passaic) “This is a commonsense, cost saving measure.”
“Any plan that can save a half-million dollars per year without disrupting state services is worth doing,” said Quijano (D-Union). “With finding costs savings so vital, this is a must.”
“Most people today have direct deposit and manage their accounts online. It’s efficient, avoids paper clutter and will save the state quite a lot of money. It’s a win-win,” said Moriarty (D-Camden/Gloucester).
The law allows the state, a county, a county college, a municipality or a school district to grant an exemption from the direct deposit requirement on such terms and conditions as they may deem necessary, and specifically exempt seasonal or temporary employees from the direct deposit requirement. It clarifies that providing any information concerning net pay, accompanying information and W-2 forms to employees must be done in compliance with applicable federal law, and must be available only on the Internet with restricted access and policies and procedures to protect the integrity and confidentiality of the information.
